Case Study

Starling Yard and The Longfellow

8 min read

Converting Schools, a Tough Subject for Developers to Learn

Converting an old school into apartments isn’t easy. The original building may require some shoring up after long periods of standing empty. HVAC issues are sure to be thorny. And, if it is financed with Historic Tax Credits, the National Park Service and the State Historic Preservation Office will become your design partners, negotiating with you on what you can and cannot do (especially on the building exterior).

Sometimes, though, what looks to be a terribly complicated adaptive reuse can be reduced to broad strokes. The problem of converting classrooms into apartments? It was done on a one-to-one basis at The Longfellow in Cleveland, a development of Vesta Corporation in partnership with construction firm Marous Brothers Construction, and similarly at Starling Yard, a Woda Cooper Companies project in Columbus.

How did that work? One classroom became one apartment, with dividers put in to delineate bedroom, bathroom, et al. With the old blackboards retained and old lockers still intact in the wide hallways outside, residents still have plenty of reminders of the original use of their living space.

Another broad stroke turned Longfellow’s auditorium into a common room for the residents living there, and an old gym into an exercise room.

Some developers seem to enjoy the challenge of school conversions. Woda Cooper, for instance, has done over half a dozen of them, including, most recently, Starling Yard.

Jonathan McKay, vice president, development at Woda, says “We’ve done quite a few. It’s not for the faint of heart, because there’s a lot of work that goes into them.”

The Longfellow, on the other hand, is the first school conversion for Vesta, says Aaron Greenblatt, the firm’s counsel.

Vesta wouldn’t be averse to doing another one, Greenblatt says, but the state of Ohio has recently thrown a monkey wrench into the proceedings with the legislature proposing and the governor signing a bill saying no State Historical Housing Credits can be awarded for a project receiving Federal Low Income Housing Tax Credits in the state.

“That’s going to make it a lot harder for projects to get done,” says Greenblatt. (The state recently implemented a state LIHTC to make up for some of the shortfalls.)

A Complicated Financing
Starling Yard got in under the wire, as McKay describes a capital stack of State and Federal Historic Tax Credits, LIHTC equity, gap financing from the Ohio Housing Finance Agency, the City of Columbus’ bond fund, the Franklin County Capital Magnet Fund, a deferred developers fee and a permanent mortgage from Cedar Rapids Bank and Trust.

The total development cost is $33.5 million. Marble Cliff Capital was the tax credit syndicator.

“It’s nice to be able to repurpose some of these old buildings,” McKay says. Starling Yard is named after the old Starling School, built in 1908 with additions put up in the 1920s and 1950s.

The adaptive reuse of the school will produce 45 units of low-income housing, he says. The new buildings will provide an additional 52 newly constructed units in two three-story walkups.

“It’s sort of a unique campus-type setting,” he says.

Both projects include some preservation of original elements, such as blackboards. In another design element, both projects have used the opportunity of the adaptive reuse of the school to add units by constructing new buildings adjacent to the old ones, with each designed to complement the design of the original.

At Starling Yard, vacant since 2013, as well as The Longfellow, “the classrooms lend themselves well to be units,” McKay says. “We don’t have to move walls around as much, which is nice.”

The original tin ceilings will be restored and preserved, he says.

“We’re restoring it back to the original character it had in the 1920s,” he says. “There’s a good chance we’ll have some residents come back who went to the school.”

Old School, New Windows
Modern touches will include all-new energy-efficient windows (with a LEED Silver rating).

The new buildings, though not designated as historic, have been designed to complement the old school, McKay says. “They’re not something that sticks out,” he says.

Work on the exterior of the school building included restoring the façade, eliminating graffiti, removing barred windows and chipping paint.

“The structure itself, the character is there,” he says.

“There’s just some TLC that needs to be done.”

Under construction now, Starling Yard is intended to be finished in the fall of 2024.

Adaptive school reuses Woda has done have included the Sycamore House, Nelsonville Commons, Washington School in Washington Courthouse, OH and a school in Portland, MI.

Vesta’s Greenblatt says his firm got involved in The Longfellow project when the Cleveland Restoration Society was looking for developers to keep the historic school, designed by well-known Cleveland architect Walter McCornack in 1924, from the wrecker’s ball.

The Longfellow, like Starling Yard, had been vacant for about ten years “and had outlived its useful life,” Greenblatt says. His family-owned firm has been around since the 1980s and specializes in affordable housing using LIHTC.

It now manages 9,000 properties in Connecticut, Ohio, New York, the District of Columbia, Maryland, New Jersey and Virginia. It is also a third-party manager for other firms.

The total development of the project, located in the Collinwood section of Cleveland, is $23 million. The financing involved both four and nine percent LIHTCs, says Greenblatt, and both State and Federal Historic Credits. A condo structure applied the nine percent credits to 58 of the units and the four percent to 22 units in the new building.

“This is probably the most complex financing structure we’ve ever been in,” Greenblatt says.

Other funding sources include a Cleveland Housing Trust Fund loan, $1.2 million from the Department of Housing and Urban Development, HDAP funds from the Ohio Housing Finance Agency, and both a deferred developer fee and a small developer loan.

The school conversion amounts to 30 units, says Greenblatt, and includes an old auditorium, which will be used as a common space. An old gym on the second floor is being turned into a workout space.

Greenblatt says the building was distinctive, brick construction with a U-shaped chimney in the middle.

“For the school, we just used the existing classrooms. They have the old chalkboard, and some of them have these intricate wood cubbies in the entranceways.”

One classroom equals one apartment, Greenblatt says. The units are one-bedrooms of about 800 square feet.

Old wood floors have been refurbished, and the high ceilings and wide hallways of the school have been retained, he says.

The new construction is for 50 units of one- and two-bedroom apartments for seniors, and there will be a walkway between the two buildings for ease of passage. There are brick finishes on the exterior to keep it in sync with the older building.

The two-bedroom units will be more than 800 square feet while the one-bedrooms will be a little smaller.

“We have started leasing there,” Greenblatt says, “and by the end of the year it will be fully leased.”

The new building contains the management office. Outside there is a converted baseball field that has been made into a park with a walking path.

It’s not impossible that some of the residents at the project will have personal memories of Longfellow School, Greenblatt says. One of the folks who turned up at an event there a couple of months ago let everybody know he was a janitor who had worked at the school back in the day.

Arne Goldman, director of business development at Designer/Builder Marous Brothers Construction, says the wide corridors at Longfellow created a challenge for the project because it cut down on the amount of space that was generating income. Adding the new building allowed that net lease square footage ratio to come back up into a more normal range of about 80 to 85 percent.

The smaller efficiency ratio of 50 to 60 percent using the school building only “made the project harder to pencil,” he says.

But beyond the problem of too much non-leasable space, Goldman calls the school “a beautiful building. It’s very well built,” with huge windows and spacious rooms.

Goldman notes that Marous Brothers Construction does not shy away from school adaptive reuse projects. It has converted old schools into apartments and other uses as well, such as memory care and assisted living facilities.

He also notes Cleveland built so many schools back in the day that it was recognized as the “Cleveland Architectural Style.” Many of those old schools are still standing and could be turned into apartments or other uses in the future.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.